Gov. John Bel Edwards, at lectern right, addresses the joint session for the opening of this year's third Special Legislative Session to deal with the state budget Monday June 18, 2018, in Baton Rouge, La.

Jeff Sadow: Greater cost control could help close Louisiana's budget gap

Gov. John Bel Edwards, at lectern right, addresses the joint session for the opening of this year's third Special Legislative Session to deal with the state budget Monday June 18, 2018, in Baton Rouge, La.

As the Louisiana Legislature churns through its third special session of 2018, the man who called it, Gov. John Bel Edwards, wants lawmakers to ignore the man behind the curtain and instead concentrate on the tale he spins.

That narrative is that Louisiana must reinstitute a half-cent of the one cent of state sales tax expiring at the end of the month, as opposed to doing nothing or accepting a Republican-backed proposal to peg that hike at some lower figure. The potential for a compromise now exists, but the GOP majority should not be distracted from investigating cost-cutting.

One woeful Edwards yarn concerned a proposed $34.7 million reduction in the Department of Children and Family Services, the program that administers the Supplemental Nutritional Assistance Program, generally known as food stamps. While the federal government pays for all benefits distributed, the state must pick up about half of administration costs, or $64.7 million according to DCFS.

The one-third cent tax option would leave the department around $11.6 million short. Federal law says the program must fund all comers, or none. The department says cuts would terminate the program, by failing to meet federal administrative requirements.

But greater cost control could close this gap.

First, the state could jettison its optional waiver that allows it to distribute aid to able-bodied adults without dependents, approximately 7.5 percent of all recipients.

Other states doing this have seen caseloads in this category fall, typically by 80 percent, while statewide employment figures rose. This would equate to around $3.9 million saved. And this move likely would raise additional revenues as well, for other states report a substantial number of those exiting the program and finding work; the former recipients have seen their average incomes rise substantially, as much as doubling, reaping the state tax dollars it won’t get from food stamps.

The state could also bring administrative costs down. At $26.75 per household (2016 data), only two southern states had a higher figure, with most of the rest substantially lower than Louisiana’s. Reduced to the average cost of administration in Alabama and Mississippi, that saves another $3.5 million.

And although the department spends $2.5 million yearly on fraud detection, that may prove inadequate to diminish improper payments. Among the states, Louisiana ranks 46th (2016 data) in median household income; its almost $300 monthly per household SNAP payments are the second highest.

The three states with lower incomes — Arkansas, Mississippi, and West Virginia — have average SNAP payouts about $50 less per month.

Family size — the other determinant of benefit levels besides income — shouldn’t vary much across states, so why should Louisiana’s payments be so much higher? If underreporting income for verification purposes is as erroneous as the Legislative Auditor’s Office discovered for Medicaid — about half of applicants listed incomes at least $20,000 below their tax return figures — this could mean much waste.

There are other horror stories in the budget, according to the administration.

There’s the claim Louisiana must release 10,000 prisoners unless the half-cent increase restores a $39.1 million reduction from this year’s budget to house state prisoners in local jails. The state, which doesn’t have room for these convicts, pays local authorities $24.39 a day per inmate.

But the math indicates that the state couldn’t pay for only about 4,400 of those inmates. Closing a state-run prison and reopening a previously closed, privately run one, as the latter operates less expensively, in conjunction with adopting the one-third cent renewal, leaves state funding short by about 1,000 beds (although without funding re-entry or work programs in local jails). Surely the Department of Corrections could bridge this gap through increasing parole and probation or employing other efficiencies.

Legislators shouldn’t let Edwards scare them out of controlling costs, thus forcing them to raise more in taxes.

Jeff Sadow is an associate professor of political science at Louisiana State University-Shreveport. He writes about Louisiana politics at www.between-lines.com, where links to information in this column may be found. When the Legislature is in session, he writes about it at www.laleglog.com. Follow him on Twitter, @jsadowadvocate or email jeffsadowtheadvocate@yahoo.com. His views do not necessarily express those of his employer.